Boot Camp 4 Entrepreneurs

Session 2:April 16, 2012

5-6:30

Feasibility Testing & Agile Business Planning: Getting to a Minimum Viable Product

2

Introductions

Homework Review• SBA

• Art of the Start• Lean Startup

Crossing the Chasm

Target Niche Customer Pain Point

Emotional Solution

Pitch Your Prospect Activity

Entrepreneurship Steps Business Map

Strategy Scoreboard

RERO• Analysis Paralysis

MVP Get Out of the Building

GTD the SCRUM Way

Business Model

Bonus: E-Myth

Agenda – Session 2

Customer Pain

Emotional Solution/Value Proposition

How to communicate

Monetize & Make Process Better

Prototype & Sell Today

Agile Business Plan Worksheet

Market Feasibility

Financial Feasibility

Company:Version:

4

What is the Chasm?

• Space in lifecycle that can mean death• Valley of death between first customers and

the rest• Entrepreneur’s dip in the roller-coaster

5

How can you Cross the Chasm?

• Win the target customer• Bowl over the first bowling pin• Celebrate the niche target market• Listen to the customer pain point

6

What’s a Customer Pain Point?

• A complaint• “Too hard”• “Takes too much time”• Wish there could be more of• It is a problem for you• Feel need is unmet• Emotional need

Target Customer Pain• Guilt• Google

“complaints”

7Know thy customer

Who is your customer?

Age/Family Stage

Gender

Ethnicity

Income/SES

Location

Generation

Aspirations

8

Target Customer Pain• Guilt• Google

“complaints”• Takes too

much time and effort

Meaningful, Emotional Solution• Save your

loved ones• They’ll love

you• Saves you time

Prototype & Sell• Would you

use?• Would you

recommend?• How much

should I sell it for?

• Google tools

Business Model• How will you

make $• Wheel• Breakeven• 3 statements

Entrepreneurship Steps

9

Mission Vision

StrategyWhat can you sell today?

Values

Business Map

Agile Business Plan Worksheet

Market Feasibility

Financial Feasibility

Company:Version:

11

“I never want to build something that nobody wants to buy.”

Thomas Edison

Why do you need to test assumptions?

12

Sell/Measure

Learn & Refine

Build /Prototype

Why do you need to test assumptions?

13

Why do you need to test assumptions?

Prototype a Minimum Viable Product (MVP)

14

How will you fail forward?

• Extreme uncertainty• Don’t know what we don’t know

• Make unknowns known – Fast!• List your best guesses• Test your guesses

• List your learnings• Refine your offerings

15

Target Customer Pain/Unmet Need

Growing Niche Target

Value Proposition - Product/Service Offering

Communicated How?

Delivered How?Revenue Model/How will you

make $

Breakeven Point

List your Guesses to Test

16

“‘Nothing but perfection’ may be spelled, ‘P-A-R-A-L-Y-S-I-S.’”Winston Churchill

•Beware analysis paralysis•Release early, release often•Get to MVP and test assumptions

RERO

17

Why you have to ask for the sale to customer (before you’re “ready”)

18

Target Customer Pain

Emotional Solution/Value

Proposition

Record Learnings

“Get Out of the Building!”Pitch your Prospect

19

GTD•Do every task that comes at you in 2 min or less•Anything else is put on the calendar with start and end dates•You are allowed to “renegotiate”

SCRUM•Be accountable to someone else weekly•3 Questions: 1) What did I accomplish, 2) What am I going to accomplish next, 3) What I’m stuck on

Key to Success: ExecuteGetting Things Done (GTD)

The SCRUM Way

Agile Business Plan Worksheet

Market Feasibility

Financial Feasibility

Company:Version:

21

6 out of 10 businesses shut down in first 4 years. Why?

1. Poor Execution2. No Viable Market3. Too Much Leverage/Debt

4. Lack of Competitive Advantage

5. Picking a Niche That is too Small

6. Breakup of the Founding Team

7. Poor Pricing Strategy8. Growing too Fast

22

When will you Breakeven?

Financially Feasible:Why do I need the Big 3?• Smart business people know

• Do projected and actual statements monthly for 1-3 years

• Don’t be a “bean counter,” but do count your beans

• If you don't know how your money is moving, you won't know how you are doing

• 3 views on the financial health of your business

What’s the dif?• "Big 3" Review to Remember:

1. Income Statement shows profit for the period of time displayed

2. Cash Flow shows if you have cash to pay your bills for the period of time displayed

3. Balance Sheet shows how much your company is worth as a snapshot in time

What is an Income Statement?

• Income Statement (or Profit and Loss or P&L) shows how profitable your company is

• Profit = all of your revenue - all of your expenses

• Profit matters because any profit that is gained goes to the business's owners

What is a Cash Flow Statement?• Shows if you have the cash to meet your bills when you

need to

• Different from the Income Statement• Cash flow is not “interested” in profit• Cash flow is “interested” in cash• Any kind of cash from anywhere

• Shows the cash coming in for the month and the cash going out for the month

• If you subtract the cash going out and come up short, you will need to get more cash

What is a Balance Sheet?

• Snapshot in time of how much your company is worth

•What your company owns, which are its assets

•What your company owes, which are its liabilities

•Gives your owner's equity or net worth• Net worth = assets (own) - liabilities (owe).

Let’s Review

• 3 views of your company’s financial health are important:

1. Income shows whether your company is profitable (revenue – costs) (leaving money for you, the owner)

2. Cash shows whether your company has money to pay its bills when needed (any cash – bills)

3. Balance sheet shows how much your company is worth (own – owe)

Agile Business Plan Worksheet

Market Feasibility

Financial Feasibility

Company:Version:

30

Love what you do

Franchise prototype

Top 5 Processes

Checklist Manifesto

Check the running of

the checklists

E-Myth

Building Something

Customers Want

31

Core Value Proposition

WebsiteBrand/logoFriendly GreetingsPayment Process

Brainstorm List to Exceed Expectations

Building Something Customers

Want

32

Introductions

Homework Review• SBA• Art of the Start• Lean Startup

Crossing the Chasm

Target Niche

Customer Pain Point

Emotional Solution

Pitch Your Prospect Activity

Entrepreneurship Steps

Business Map

Strategy Scoreboard

RERO• Analysis

ParalysisMVP

Get Out of the Building

GTD the SCRUM Way

Business Model

Bonus: E-Myth

Agenda – Session 2